Aegon Ltd. · EURONEXT:AGN
Aegon — Goldman Sachs European Financials Conference 2008
30 slides from Aegon's conference presentation, Jun 11, 2008
Slide 1: Unlocking the global potential
Unlocking the global potential GS European Financials Conference – June 11, 2008 Alex Wynaendts, CEO Unlocking the global potential 1
Slide 2: Key messages
Key messages A solid foundation High ambitions 3 strategic priorities: 1. Reallocate capital towards businesses with higher growth and return prospects 2. Improve growth and returns from existing businesses 3. Manage AEGON as an international Group Unlocking the global potential 2
Slide 3: Changing fundamentals creating attractive prospects
Changing fundamentals creating attractive prospects Fundamental demographic and economic changes… o increasing longevity and ageing populations o global wealth creation, extending into new markets o financial market volatility o reduced safety net from government, employers and family …generating ne
Slide 4: Well positioned in key markets
Well positioned in key markets Customer needs Protection Accumulation Dis-savings Institutional/ Reinsurance Regions North America Western Europe CEE Asia Latin America Strong position Presence Unlocking the global potential 4
Slide 5: A solid foundation
A solid foundation Liability creation & Capital & risk Asset management management management o Local knowledge of o Financial strength & o Liability-driven customer needs flexibility investment management o Innovative tailored o Local risk decisions solutions within integrated o Investment global r
Slide 6: High ambitions to drive sustainable profitable growth
High ambitions to drive sustainable profitable growth “To be a global leader in helping customers secure their financial futures” Leadership Secure financial futures o Focus on largest and fastest o Build on our expertise in life growing global profit pools and pensions o Build scale and competitive
Slide 7: Ambitious targets
Ambitious targets Grow value of new business to EUR 1.25 billion by 2010 o Delivering on increased 2010 target Earnings growth of at least 10% p.a. to 2012 o Average net underlying earnings growth target in excess of 10% p.a. to 2012 from 2007 base of EUR 2,033 million (at 2007 constant currency) Re
Slide 8: Strategic priorities to improve performance
3 strategic priorities to improve performance 1 Reallocate capital towards businesses with higher growth and return prospects 2 Improve growth and returns from existing businesses 3 Manage AEGON as an international Group Unlocking the global potential 8
Slide 9: Strategic priorities to improve performance
3 strategic priorities to improve performance Reallocate capital towards o Improve capital efficiency 1 businesses with higher growth and return prospects o Optimize capital allocation by adjusting business and geographic mix Improve growth and returns 2 from existing businesses Manage AEGON as an 3
Slide 10: Room to improve capital productivity
Room to improve capital productivity Unlevered return on capital 20071 30% United CEE US Netherlands Kingdom France 20% Canada Spain Asia 10% 0% % of Capital2 25% 50% 75% (15%) (20%) 20% US 20% Netherlands 20% United Kingdom 10% 10% 10% 0% 0% 0% Businesses % Businesses % Businesses % (10%) 1. Net un
Slide 11: Improve capital efficiency
Improve capital efficiency Optimize o Implement more capital o Capital releases from back books structure o Reinsurance o Insurance linked securities Reduce o Further reduce capital o Equity risk intensity o Interest rate risk Maximize o Manage portfolio of risks diversification o Reset retention li
Slide 12: Optimize capital allocation
Optimize capital allocation Business mix Geographic mix o Continuous assessment of Capital allocation group portfolio 5-10% Global businesses 15-25% New markets* o Strict strategic and financial 10% criteria o Core business: 30% 25-35% Western Europe fits life cycle need o Growth o Returns / risk 60
Slide 13: Disciplined and focused acquisitions and divestitures
Disciplined and focused acquisitions and divestitures Acquisitions and divestitures are important to support strategy to reallocate capital across the portfolio We will maintain our strict strategic and financial criteria 3 focus areas: 1. Accelerate growth in our new markets through o add-on acquis
Slide 14: Implications for capital productivity
Implications for capital productivity 2007 2010 2012 Unlevered return on capital1,2 (RoC) 9.6% >11% >12% Holding and leverage effects 2.4% 3% 3% Return on equity2,3 (RoE) 12.0% >14% >15% Unlevered return on capital (RoC) 2007 Americas 10.6% The Netherlands2 10.2% United Kingdom2 6.9% Other 4.4% 1. W
Slide 15: Strategic priorities to improve performance
3 strategic priorities to improve performance Reallocate capital towards 1 businesses with higher growth and return prospects o Invest in higher growth, higher return businesses in the US o Accelerate product and channel 2 Improve growth and returns from existing businesses diversification in the UK
Slide 16: Invest in higher growth, higher return businesses in the US
Invest in higher growth, higher return businesses in the US Sources of US earnings 2007* Key objectives Invest in higher growth, higher return Fee business in the US 15% Investment Continued growth in varying market spread conditions 40% Technical 25% Grow revenue generating investments Earnings Ong
Slide 17: Accelerate product and channel diversification in the UK
Accelerate product and channel diversification in the UK 2005 2007 2010 Value new business GBP 67 mln GBP 157 mln GBP 213 mln VNB margin1 16% 21% 22% Non-IFA distribution2 13% 19% 25% o Continue to deliver on the clear and consistent strategy o Drive market share in attractive segments o Improve cap
Slide 18: Address profitable growth challenge in the Netherlands
Address profitable growth challenge in the Netherlands o Strong cash flow generation o New CEO with clear mandate o Significant recent operational o New plan being developed to improvements accelerate profitable growth Update Update before before the the end end of of the the year year Unlocking the
Slide 19: Build scale in new markets: Western Europe and CEE
Build scale in new markets Western Europe Central & Eastern Europe oo Expand Expand successful successful oo Achieve Achieve market market leadership leadership (top (top 5) 5) bancassurance bancassurance model model in in Spain Spain in in all all our our markets markets oo Capture Capture cross-bo
Slide 20: Build scale in new markets: Asia and Latin America
Build scale in new markets Asia Latin America oo Establish Establish regional regional office office in in Hong Hong oo Build Build scale scale in in Mexico Mexico through through Kong Kong organic organic growth growth and and acquisition acquisition oo Improve Improve financial financial performan
Slide 21: Strategic priorities to improve performance
3 strategic priorities to improve performance Reallocate capital towards 1 businesses with higher growth and return prospects Improve growth and returns 2 from existing businesses o Launch global businesses o Asset management o Life reinsurance Manage AEGON as an 3 international Group o Variable ann
Slide 22: Strong asset management businesses
Strong asset management businesses Strong asset management businesses with local focus o Assets under management of EUR 271 billion* o Diversified asset and client base Other Real estate 3% 9% Third-party 21% Multi- manager 15% General Fixed account income 48% 54% Equity Policyholders 19% 31% o Stro
Slide 23: Creating a leading global asset management business
Creating a leading global asset management business Appointment of a global asset management team o Erik van Houwelingen, Chairman of the Executive Committee o Eric Goodman, CIO US and Head of General Account Management o Andrew Fleming, Head of European Asset Management The Mandate o Implement a gl
Slide 24: Manage life reinsurance as a global business
Manage life reinsurance as a global business o AEGON global life reinsurance is a core business o Build a global life reinsurance business by expanding into international growth markets (Asia, Europe, Latin America) o Provide infrastructure and knowledge to support AEGON businesses AEGON ranked #2 i
Slide 25: Become a leader in variable annuities in Europe
Become a leader in variable annuities in Europe The variable annuities opportunity in Europe (EUR billion in AuM potential) Approach UK Netherlands Germany o Leverage US resources and hedging expertise 70 -170 10 - 30 40 - 90 o Build on UK success across Europe: o Starting in Spain and France o Expa
Slide 26: Broaden the role of the Management Board
Broaden the role of the Management Board Alex Wynaendts CEO Jos Streppel CFO Corporate center Pat Baird Americas Gábor Kepecs Asia Pacific Global life reinsurance Central & Eastern Europe Marco Keim Otto Thoresen The Netherlands United Kingdom India Variable annuities in Europe Unlocking the global
Slide 27: Manage for performance
Manage for performance o Align top management incentives with targets o Cascade incentives throughout the organization o Leverage global talent pool Unlocking the global potential 27
Slide 28: Positioned to deliver
Positioned to deliver Ambitious targets Clear strategic priorities Management committed to deliver Unlocking the global potential 28 28
Slide 29: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements Cautionary note regarding forward-looking statements The statements contained in this presentation that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following ar
Slide 30: For questions please contact Investor Relations
Unlocking the global potential For questions please contact Investor Relations +31 70 344 8305 ir@aegon.com P.O. Box 85 2501 CB The Hague The Netherlands Unlocking the global potential 30
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